NASSAU, The Bahamas — As he tabled what he termed two of the “most significant policy documents in the Government’s fiscal calendar,” Prime Minister and Minister of Finance the Hon. Philip Davis noted, in the House of Assembly, on February 1, 2023, that the 2022 Fiscal Strategy and the Fiscal Year 2023/24 – Fiscal Year 2025/26 Medium-Term Debt Management Strategy Reports articulated the specific policies and strategies of his administration, which, he said, were restoring the country’s fiscal health, as promised in the “Speech From the Throne” and the “Blueprint for Change” outlining his Government’s agenda.
Prime Minister Davis began his Communication with an overview of the 2022 Fiscal Strategy Report.
He said: “This report outlines the Government’s plans to achieve specific fiscal targets. These targets include: an improvement in Government revenue yield to more than 24 percent of GDP by fiscal year 2024/25; a measured reduction in Government expenditure to less than 23 percent of GDP by fiscal year 2024/25; and, as a result of these measures, achievement of a budget surplus by fiscal year 2024/25.”
Prime Minister Davis pointed out that, in accordance with the Fiscal Responsibility Act 2018, the Fiscal Strategy Report is to be tabled in Parliament on the third Wednesday of November of each year.
“While in opposition, and since coming to office as the Government, we have articulated on multiple occasions the fundamental flaws in the FRA — including this very same timeline,” he said.
“During the fiscal year 2022/23, the FRA would have required Government to table its Fiscal Strategy report in Parliament on 16 November 2022,” he added. “This date was simply not feasible, for at this time The Bahamas was in the middle of its S&P bi-annual credit rating review. Tabling such a document would have interfered with the independent review process.”
Prime Minister pointed out that the results of the S&P review were not released until November 22, 2022. That event, he added, was very significant for The Bahamas, as for the first time in almost a decade, positive signs were observed in The Bahamas’ credit rating.
“While the S&P rating did not provide an improved credit rating for The Bahamas, it did provide for an improvement in the credit outlook from negative to stable,” he said.
“I point this out to emphasize that this constitutes a reversal of the country’s deteriorating credit position,” he added.
“Our plans to restore the country’s fiscal health are working.”
Prime Minister Davis said that, given the significance of that report and its implications for the Government’s fiscal policies, projections and debt sustainability, the 2022 Fiscal Strategy Report and Debt Management Strategy were deferred to allow for inclusion of that significant outcome in his Government’s projections, policies and strategy.
“In tandem with the most recent Fiscal Strategy Report is the release of the updated Medium-Term Debt Management Strategy,” he added. “This document also benefits from the country’s rebounding credit profile, which is reflected in factors such as interest rates, access to financing and the overall financing plan.”
Prime Minister Davis said that, as a result of that analysis, the general outlook was that fiscal plans implemented by his administration since coming to office were already bearing fruit.
He said: “As a result, the public can expect the achievement of a budget surplus by FY2024/25; and a decline in the debt to GDP ratio to 67.1 percent by FY2026/27.”
Prime Minister Davis said that the comments that he made that day about The Bahamas’ fiscal health echoed those of reputable international financial institutions and economists, who had performed advanced reviews of the draft documents.
He added that it was widely believed that the most recent FSR was the most “comprehensive and clearly articulated strategy the country has ever produced”.
“And these are not just technical achievements – they represent real progress for The Bahamas, progress that Bahamians are going to feel,” Prime Minister Davis said. “Progress on our fiscal goals supports our efforts to build a diversified economy, one that will generate more inclusive opportunities and prosperity.”
“Progress on fiscal goals means progress for people,” he added.
“We have always been clear-eyed about the scale of the challenges we face, but also confident that we have what it takes to chart a new course forward.”
“May God bless us, and speed us on our way.”